The Deal that will save CGX If you read the Management Informational Circular and Financial Statements on pages 20-23 a Yes vote does the following:
1.For $30 million dollars Pre gets 85 million share at $.35 and warrants equivalent to 42 million shares at $.60 or about 41% of the company.
2.PRE gets 3 of their top people on the board, one of which is the President of PRE (page 15- Jose Francisco Arata).
3.To allow the sale of the stock to go through the Shareholders Poison Pill has to be dismantled(page 22,#2). We have no protection from a hostile takeover,because this is a friendly takeover,as CGX management implies in their press conferences.
4.Allow PRE to opt in on drilling projects for the Annex and Corentyne concessions for 50% of the cost to earn 33% of the oil. Usually a farm in , which this is a hybrid type, allows a partner to put up some buy in money, for the chance to drill one site, not whole concessions.
A No vote does the following:
1.The $30 million becomes due and owing after July 31st. CGX's 4 offshore concessions is pledged to secure the loan. The on shore concessions owned by CGX and ON Energy is not mentioned. Yet PRE's expertise is in saving near dry oil fields.
2. PRE still gets the 3 Directors, which can influence any other decisions by the board to raise financing.
3.PRE can now go on the open market and buy stock voiding the standstill agreement sign last year when they made their initial investment. So if Jaguar is a hit ,very costly to take over CGX. If a duster they can pick it up prehaps cheaper than $.35.This might then be considered a hostile take over if the board agrees and it gets messy. We don't want this option.
4. PRE still has the right to drill on the Annex and Corentyne.
Such a deal! PRE wins coming and going , whether you vote yes or no,we are boxed in.